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Automotive parts replacement is a $170 billion-ayear industry [3]. Automotive parts remanufacturing provides vehicle owners with an alternative to new replacement parts. Not only does this alternative save the customer money, it also addresses the concerns of different constituencies, including environmentalists. Furthermore, when marketers are able to design effective strategies for remanufactured goods, many social and economic benefits accrue [8]. Remanufacturing is, therefore, a socially and ecologically preferred option for some products if, and only if, those products are desired by customers [8].
Remanufacturing is an integral part of product recovery management (PRM). The objective of PRM is to recover as much of the economic value as possible from used parts, while reducing large quantities of waste [18]. The five product recovery options are repair, refurbishing, remanufacturing, cannibalization, and recycling. All options are suitable for both products and components [18].
Three characteristics distinguish remanufactured goods from repaired products. First, "[ti he purpose of remanufacturing is to bring used products up to quality standards that are as rigorous as those for new products [18]." Second, remanufacturing is a more comprehensive form of restoration. And third, to take advantage of economies of scale, remanufacturing is performed on a large number of accumulated homogenous products that are redistributed through various channels of distribution.
According to the APICS Dictionary [2], remanufacturing is "an industrial process in which worn-out products are restored to like-new condition. In contrast, a repaired or rebuilt product normally retains its identity, and only those parts that have failed or are badly worn are replaced or serviced." This definition makes a clear distinction between remanufacturing and repairing/rebuilding. It is generally agreed that remanufactured products have received an extensive reconditioning process that involves disassembly, cleaning, inspection, replacement of parts and/or repair as needed, reassembly, and refinishing [8,18].
According to Lund [11], the range of commercial products being remanufactured in the United States is broad and can be divided into four general categories. To Lund's four categories, we add another category, Department of Defense, since it is one of the largest remanufacturers in the United States dedicated to reducing costs and utilizing the benefits of technology. The five categories are given in Table 1.
Of the five categories listed, the automobile industry provides the greatest application for...